A Firm Sells Two Different Products,A and
A Required:
A

question 88

Essay

A firm sells two different products,A and
A. Total fixed costs for this firm are $1,260,000. Additional selling prices and cost information for both products follow:
$\begin{array}{rrr}&\text { Selling } &\text { Variable }\\ \text { Product } &\text { Price per }&\text { Costs per }\\&\text { Unit } &\text { Unit } \\\text { A } & \$ 72 & \$ 40 \\\text { B } & 48 & 28\end{array}$ Required:
a. Calculate the contribution margin per composite unit.
b. Calculate the break-even point in units of each individual product.
c. If pretax income before taxes of $294,000 is desired, how many units of A and B must be sold?
B. For each unit of B, the firm sells two units of

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Definitions:

Lymphatic System

A network of tissues and organs that help rid the body of toxins, waste, and other unwanted materials, primarily transporting lymph, a fluid containing infection-fighting white blood cells.

Erythrocytes

Red blood cells that carry oxygen from the lungs to the body tissues and carbon dioxide as a waste product away from tissues back to the lungs.

High Lipid

A condition characterized by an elevated level of lipids in the blood, which can increase the risk of cardiovascular diseases.

Chyle

A milky bodily fluid consisting of lymph and emulsified fats, absorbed from the intestines during digestion.